Gold loan financier Muthoot Finance Ltd has raised $450 million through its maiden offshore bond issue from investors across the US, Asia and Europe, the company said in a statement on Tuesday.

The bonds will mature in three years and have a coupon rate of 6.125%. “The proceeds will be used for permitted purposes including onward lending in accordance with RBI’s (Reserve Bank of India) ECB guidelines and other applicable laws," the company said.

The bond sale received orders in excess of $1.2 billion, with the issue subscribed over 2.5 times. The transaction witnessed 37% participation from Asia, 28% from Europe & Middle East, and 35% from the US, with 88% investments from asset managers , 6% from insurance and pension funds, and 6% from rest. The bonds will be listed on the London Stock Exchange.

“The response from international bond investors to our debut international bond issue once again reiterates the robustness and long track record of our gold loan business and is a recognition of India’s retail credit story. This fundraise will enable us in further diversifying and strengthening our sources of funding. We look forward to strengthening our partnership with global investors," said M.G.George Muthoot, chairman of Muthoot Finance.

Deutsche Bank and Standard Chartered Bank advised the company on the fundraise.

“The deal saw an overwhelming response from the global investor base, an exhibit of the strong credit profile of Muthoot Finance. On the back of a robust marketing effort, we were able to achieve a 2.5x oversubscription and tap quality investors across geographies," said Sameer Gupta, head of India debt capital markets at Deutsche Bank.

Muthoot Finance has a network of 4,502 branches across 23 states and five union territories in India. Its loan assets stood at Rs3,4246 crore as of 31 March, with profit at Rs1,972 crore for FY2019.

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